Dispatches from the space race

University fees: the end of buy-to-let?

Rising student numbers has been one of the reasons why the buy-to-let market has boomed in recent years, but will pricey tuition fees hammer landlords?

Landlord Assist, who provide services to landlords, are worried that the new policy will have serious consequences and are urging landlords to plan ahead.

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Graham Kinnear, Managing Director at Landlord Assist, says: “Whilst the majority of students have historically moved away from home to study we wonder whether this practice will continue in light of tuition fee increases.

“The student population in major university towns could plummet, leading to a catastrophic decline in demand for student housing. A number of our clients rely on student lettings for their income and this is clearly a concern for them.

“Many student properties could be made available for the standard private rented sector; however, the yields on student properties do tend to be higher.

“We are urging student landlords to be aware of changing market conditions and to regularly review their business strategies in order that they do not get caught with a glut of unwanted property”

Students staying close to home

Could this result in a fire sale of investment properties in university towns? If a study by home insurance company LV= is correct, then that seems inevitable.

Next year’s tuition fee increase, coupled with declining numbers of 18 to 24-year-olds in the general population, will see a 14% fall in higher education numbers over the next decade, the study says.

They forecast that the number of students living in the city of Newcastle will slump by 52% in the next nine years – a loss of 15,000 students. It also predicts the student population of Sunderland will fall by 35%.

Other cities which will feel the impact include Swansea, Portsmouth, Stoke-on-Trent and Nottingham, with university student populations forecasted to decline by 40% in these areas.

John O’Roarke, managing director of LV= home insurance, said: “Student life is set to be transformed over the next decade, as the impact of rising tuition fees forces university students to reassess their finances and living arrangements.

“Our study suggests that by 2020, 52% of students will choose a local university and stay with their parents.” Twenty-one per cent of UK full time students currently live at home.

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One Response

I hadn’t thought of that. I am a parent of young teenagers and live in London. For me, I would be delighted with this arrangement and we could accommodate our childrens maturing need for more privacy. And they could start life with less debt. Win all round.